President Donald Trump has signedan anti-government shutdown bill that will eliminate $12.7billion in Affordable Care Act health insurer fee taxes for2019.

The new “Extension of Continuing Appropriations Act, 2018″(ECAA) will also:

• Give the federal government official permission to spend money,and continue with normal operations, until Feb. 8.
• Extend funding for the Children's Health Insurance Program forsix years.
• Push the scheduled start date of the ACA Cadillac plan tax, or 40% excise tax onhigh-cost employee health benefits packages, back to 2022, from2020.
• Suspend collection of the ACA medical device tax for twoyears.

Congressional Budget Office analysts have predicted the healthinsurer tax and Cadillac plan provisions will reduce federalrevenue by a total of about $29 billion over 10 years.

A summary of the bill posted last week is available here.

The main difference between the version posted last week and theversion signed into law is that the version signed into law has ashorter appropriation extension period.

The previous government spending appropriation act expired atmidnight on Friday. The federal government had started the processof shutting down part of its operations.

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The Vote

Congressional leaders packaged the ECAA bill as an amendment toH.R. 195, a minor Federal Register printing cost reductionbill.

Members of the House approved one version of the ECAA bill lastThursday, with most Republicans voting for the bill and mostDemocrats opposing it. That version would have extended the federalgovernment's spending appropriation through Feb. 16.

When the ECAA bill arrived in the Senate, many Democrats andsome Republicans tried to slow passage, in an effort to persuadeRepublican leaders to add other provisions, such as help forchildren brought to the United States illegally.

Senate leaders ended up working out a deal thatshortened the appropriations extension period and callsfor Republicans to continuing working with the Democrats on someother issues.

Members of the Senate today ended up passing the ECAA bill by a78-18 vote, with strong support from both Republicans andDemocrats.

Members of the House quickly approved the amended version of thebill by a 266-150 vote. The final version attracted more votes fromDemocrats than the original version.

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Reaction to Health Insurer Fee Suspension

Drafters of the ACA added the health insurer fee, or healthinsurer tax (HIT), because they thought the ACA individualcoverage “shared responsibility” requirement, or coverage ownershipmandate, would lead to windfall profits for health insurers.

Supporters of the health insurer tax thought the tax would be agood way to use a portion of the windfall profits to compensate forACA program costs.

The National Association of Health Underwriters and manyemployer groups, including the U.S. Chamber of Commerce, formed theStop the HIT coalition to fight the tax.

Elena Tompkins, the coalition's executive director, said in astatement that the temporary suspension of the tax will be good forU.S. small businesses and their employees, but she pointed outthat, at this point, health insurers still face health insurer taxbills for 2018.

“We urge Congress to continue to advance solutions that willprovide relief from the HIT in 2018 and protect millions of smallbusinesses from this misguided tax,” Tompkins said.

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Reaction to Cadillac Plan Tax Delay

Economists have argued for years that a tax on high-cost health benefits packages, oreven an explicit cap on the group health tax exclusion, can bea powerful tool both for raising government revenue and enlistingemployers in the fight to cut benefits costs. Economists saylimiting or capping group health tax benefits will give large,sophisticated employers an incentive to apply their ingenuity toreforming the U.S. health care delivery and finance systems.

Once members of Congress began talking about putting the taxinto the ACA, which was drafted in 2009 and signed into law in2010, employers and labor groups fought back. Opponents have arguedthat the tax would punish the employers that try the hardest tooffer employees great benefits.

Annette Guarisco Fildes, president of ERISA Industry Committee,said in a statement that her group has been fighting the Cadillacplan tax since 2009, when lawmakers added it to early drafts of theAffordable Care Act.

ERIC will continue to fight for permanent repeal, Fildessaid.

James Klein, president of the American Benefits Council, said ina statement of his own that the ECAA will have an immediate effecton employers, because typical large employers make benefitsdecisions 18 months to 24 months in advance.

Before the ECAA bill passed, “employers were reluctantlyconsidering curtailing benefits or increasing workers'out-of-pocket costs to meet the prior 2020 deadline,” Kleinsaid.

From: ThinkAdvisor